BUDGET 2013: Year 3 for CorbettWhat does latest budget proposal do for second-term prospects?

Gov. Tom Corbett's third go-around with the state budget has produced a 2013-14 spending proposal that tackles many of the big-ticket items many lawmakers and business leaders have been looking for in recent years.

How it will play out — June 30 is the end of the current fiscal year — is still anyone's guess.

The $28.4 billion spending plan, which has been called a "challenge-the-status-quo" budget by the administration, offers the governor's take on privatization of the liquor store system and the Pennsylvania Lottery, modernization of the commonwealth's transportation infrastructure and reform of state-level pension systems might.

Corbett's plan to fix transportation (see "Transportation tax changes ... ," page 8) is tied to lifting the oil company franchise tax cap and other measures. He also wants to drop the state tax on a gallon of gas by 2 cents over two years.

His pension approach creates a 401(k)-style system for new employees while curbing state contributions in the interim and changing the formula for current employees' future benefits (see "Legal fireworks could threaten Corbett's pension proposal," page 6).

With the governor on the ballot again next year, what might this third-year budget proposal and inevitable outcome mean for Corbett's re-election bid?

"It's not going to hurt," said Jeremy Plant, a professor of public policy and administration at Penn State Harrisburg. "(But it was) benign for most interest groups looking at the budget. The intense reaction could come from the privatization efforts, which seem to be a major priority."

Recent polls are split on liquor and the lottery, he said. Most people are in favor of the liquor store effort, but they don't like privatizing management of the lottery.

"Beyond the budget, I think Corbett knows he has somewhat of a re-election problem," Plant said. "A political scientist would say it's a good time to begin to tackle these (big) things."

However, there's a very wide range of opinions on all issues in Pennsylvania — even within the all-controlling Republican Party — which could slow progress on many of these issues, Plant said.

Transportation funding could be the hardest sell, he said, citing the enormous need and even greater costs.

Corbett's chances in 2014 also depend on whom Democrats favor as their primary candidate, Plant said.

"This was not a slash-and-burn budget, by any means," he said. "Had it been more contentious, it might have hurt his chances."

Budget proposal by the numbers

BUSINESS TAXES

$2.57 billion: Projected corporate net income tax revenue in the state's 2013-14 general fund. A 10-year reduction of the CNI begins in 2015.

$243 million: Projected capital stock and franchise tax revenue in the state's 2013-14 general fund. The CSFT would be completely eliminated in January 2014 under the governor's proposal. The tax is projected to generate $604 million in the current fiscal year.

BY DEPARTMENT OR AGENCY

Agriculture: $117.9 million proposed budget, down 9 percent from current year available.

Community and Economic Development: $245.6 million proposed budget, up 7 percent.

Corrections: $1.93 billion proposed budget, up 3.2 percent.

Education: $10.37 billion proposed budget, up 3.4 percent. The basic education subsidy, which is going up 1.7 percent, makes up $5.5 billion of that total.

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Jason Scott

Jason Scott covers state government, real estate and construction, media and marketing, and Dauphin County. Have a tip or question for him? Email him at jasons@cpbj.com. Follow him on Twitter, @JScottJournal.
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